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Protecting Your Property in Bankruptcy:
One of the schedules of assets and liabilities which will be filed by the individual
debtor in a bankruptcy proceeding is a schedule of “exempt” property. Federal bankruptcy law provides that an individual debtor can protect some property from the claims of creditors either because it is exempt under
federal bankruptcy law or because it is exempt under the laws of the debtor’s home state. [11 U.S.C. §522)(b)]. California has taken
advantage of a provision in the bankruptcy law that permits each state to adopt its own exemption law in place of the federal exemptions. In other jurisdictions, the individual debtor has the option of choosing between the
federal package of exemptions or exemptions available under state law. Thus, whether certain property is exempt and may be kept by the debtor is often a question of state law. Bankruptcy Petition Preparers are specifically
prohibited from providing any assistance in the selection of applicable exemptions for debtors. Legal counsel should be consulted to determine the law of the state in which the debtor lives.
The 2005 changes in the Bankruptcy laws changed the manner in which a debtor can
select the laws they use to protect their property. You must have made California your home for at least two years in order to use the California exemptions. If you haven’t lived within California for two years, you must use
the exemptions from the state where you lived before the two years prior to the time of filing. There are also new residency requirements for homestead exemptions (the law that allows you to protect the house you
own or are buying). Under the new law, you must have acquired your home (or paid for you home with funds from the sale of another home within the same state) within 40 months prior to filing in order to claim that state’s
full homestead exemption. If a debtor has not met this residency requirement, the allowed homestead exemption will be capped at $125,000, even if the actual exemption for that state is higher.
The following Exemption Table has been updated pursuant to the April 1, 2007
revisions published by the Judicial Council of the Administrative office of the Courts of California.
This chart is not intended to be legal advice and is only to demonstrate the
differences in the systems. WARNING: Laws and regulations are subject to change. As a result, the accuracy of this exemption list is not guaranteed. Check the specific Code Sections of the State of California for any changes.
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ASSET
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BANKRUPTCY CODE EXEMPTIONS UNDER
11 USC §522(d)
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EXEMPTIONS UNDER
CCP §704
California - System 1
(updates effective 1/1/10)
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EXEMPTIONS UNDER CCP §703.140
California - System 2
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Homestead
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The debtor's aggregate interest, not to exceed $20,200 in value, in real property or personal
property that the debtor or a dependent of the debtor uses as a
residence, in a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence, or in a burial plot for the debtor or a dependent of the debtor.
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(Subject to residency requirement)
Real or personal property you occupy including
mobile home, boat, stock
cooperative, community apartment, planned development or condo to $75,000 if single and not disabled; $100,000 for families if no other member has a homestead (if only one spouse files, may exempt one-half of amount if home held as community property and all of amount if home held as tenants in common; $175,000 if 65 or older, or physically or mentally disabled; $175,000 if 55 or older, single & earn under $15,000 or married & earn under $20,000 & creditors seek to force the sale of your home; sale proceeds exempt for 6 months after received (husband and wife may not double)
May file homestead declaration
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Real or personal property, including co-op, used as residence to $20,725; unused portion of
homestead may be applied to any property. See Wild Card Below.
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Insurance
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Unmatured life insurance contract other than credit life insurance
Accrued dividend or interest under, or loan value of, unmatured life insurance contract owned by the debtor
under which the insured is the debtor or an individual of whom the debtor is a dependent, not to exceed $10,775 less any amount of property of the estate transferred in the manner specified in
Section 542(d),
Life insurance payment under contract that insured the life of an
individual of whom the debtor was a dependent on date of death, to the extent reasonably necessary.
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Disability or health benefits
Fidelity bonds
Fraternal unemployment benefits
Homeowners' insurance proceeds for 6 months after received, to homestead exemption amount
Life insurance proceeds if clause prohibits proceeds from being used to pay beneficiary's creditors
Matured life insurance benefits needed for support
Unmatured life insurance policy loan value to $10,775 (husband and wife may double)
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Disability benefits
Life insurance proceeds needed for support of family
Unmatured life insurance contract accrued avails to $11,075.
Unmatured life insurance policy other than credit
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Miscellaneous
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Alimony, support, or separate maintenance, to the extent reasonably necessary
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Business or professional licenses, except liquor licenses (708.630)
Inmates' trust funds to $1,350 (husband and wife may double)
Property of business partnership
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Alimony, child support needed for support
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Pensions
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Stock bonus, pension, profit-sharing, annuity, or similar plan payment on account of illness, disability,
death, age, or length of service to the extent
reasonably necessary. (See exceptions listed under 11 USC §522(d)10(E)(i)
Veterans' benefits
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County employees
County firefighters
County peace officers
Private retirement benefits, including IRAs & Keoghs
Public employees
Public retirement benefits
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ERISA-qualified benefits needed for support
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Personal Property
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Household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical
instruments, not to exceed $575 value in any particular item or $10,775 in aggregate value.
Professionally prescribed health aids.
Jewelry to $1,350.
One Motor vehicle to $3,225
Personal injury recovery on account of personal bodily injury up to $18,450 ( not including pain and
suffering or compensation for actual pecuniary loss)
Payment for Loss of future earnings.
Wrongful death recovery needed for support
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Appliances, furnishings, clothing and food needed
Bank deposits from Social Security Administration to $2,700; $4,050 for husband and wife.
Building materials to $2700 to repair or improve home
Burial plot
Health aids
Jewelry, heirlooms & art to $6,750
Motor vehicle to $2550, or $2550 in auto insurance if vehicle(s), lost, damaged or destroyed .
Personal injury causes of action
Personal injury recoveries needed for support; if receiving installments, at least 75%
Wrongful death causes of action
Wrongful death recoveries needed for support; if receiving installments, at least 75%
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Animals, crops, appliances, furnishings, household goods, books, musical instruments &
clothing to $525 per item
Burial plot to $20,725, in lieu of homestead
Health aids
Jewelry to $1,350
One Motor vehicle to $3,300
Personal injury recovery to $20,725 (not to include pain and suffering or pecuniary loss)
Wrongful death recoveries needed for support
Payment for Loss of future earnings.
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Public Benefits
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Award under a crime victim's reparation law
Social security benefits, unemployment compensation, or a local public assistance benefits
Disability, illness, or unemployment benefits
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Aid to blind, aged, disabled, AFDC
Financial aid to students
Relocation benefits
Unemployment benefits
Union benefits due to labor dispute
Workers' compensation
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Crime victims' compensation
Public assistance
Social security
Unemployment compensation
Veterans' benefits
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Tools of Trade
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Professional books, or tools, of the trade of the debtor to $2,025
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Tools, implements, materials, instruments, uniforms, books,
furnishings, equipment, vessel, one commercial motor vehicle (max. $4,850 or $9,700 with joint occupation) up to $6,760 individually or $13,475 if used by both spouses in same occupation (cannot claim motor vehicle under tools of trade exemption if claimed under motor vehicle exemption)
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Implements, books and tools of trade to $2,075
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Wages
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None
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Public employees vacation credits; if receiving installments, at least 75%
75% of wages paid within 30 days of filing for bankruptcy
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None
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Wild Card
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$1,075 of any personal property plus up to $10,125 of unused amount of the exemption provided under 11 USC
§522(d)(1) of this subsection.
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None
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$1,100 of any personal property plus any unused portion of homestead
(exemption, to be partially or wholly applied to any other property.(total maximum wildcard available - $21,825)
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We are not attorneys. We are a Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code. We do not provide legal advice.
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